Net neutrality law is opposed by US Department of Justice

The US Department of Justice (DoJ) has said that net neutrality
legislation is unnecessary and could harm innovation and investment
in the internet. The DoJ has submitted its views to US
communications regulator the Federal Communications Commission
(FCC).07 Sep 2007

Some US internet service providers have proposed charging large bandwidth users such as video publishers a premium for priority access to customers. The popularity of video services has led to worries that pressure on telecoms infrastructure will lead to bandwidth shortages.

Alarmed at the prospect of publishers having to pay to have their internet content accessed by internet users, some campaigners have called for US legislation forcing all traffic to be treated equally. This is called net neutrality.

"The FCC should be highly sceptical of calls to substitute special economic regulation of the internet for free and open competition enforced by the antitrust laws," said the DoJ's filing. "Marketplace restrictions proposed by some proponents of 'net neutrality' could in fact prevent, rather than promote, optimal investment and innovation in the internet, with significant negative effects for the economy and consumers."

The DoJ argued that unfettered market capitalism was the best way to allocate the scarce bandwidth resources.

Free market competition drives scarce resources to their fullest and most efficient use, spurring businesses to invest in and sell as efficiently as possible the kinds and quality of goods and services that consumers desire," it said.

"However well-intentioned, regulatory restraints can inefficiently skew investment, delay innovation, and diminish consumer welfare, and there is reason to believe that the kinds of broad marketplace restrictions proposed in the name of 'neutrality' would do just that with respect to the internet."

The DoJ said that the offer of "different levels of quality of service at varying costs to content and application providers" would "efficiently respond to market demands".

One group which does support more regulation of broadband services, Public Knowledge, pointed out that while competition may provide an answer, it does not always exist in the US market.

“Perhaps the DoJ does not recall that there is very little in the way of market forces to protect consumers," said Gigi Sohn, president of Public Knowledge. "Perhaps the Department has forgotten that many consumers have little or no choice at all for their high-speed broadband services. A more vigorous antitrust analysis would have recognized there is a market failure and would have resulted in conditions on the AT&T takeover of BellSouth that would have benefited consumers and internet companies."

"Net neutrality would not restrict the types of services that telephone and cable companies could offer; such a policy would make certain that those companies had to do so in a non-discriminatory fashion as the law originally intended," said Sohn.